With the gold price averaging 7% below the first half of 2014, total world gold demand in H1 2015 dropped some 10% annually on GFMS’s data, with jewelry and investment demand from China – the world’s No.1 consumer market last year – dropping “substantially”.

Gold prices in Shanghai today edged higher against London quotes, pushing the premium per ounce – an incentive for new imports – up to $2.50 according to Swiss refining and finance group MKS’s trading desk.

Less demand for gold bullion to use in ‘trade financing’ means imports are likely to fall further from June’s 10-month low, says GFMS.

“All this gold that was used for financing,” agrees Michael Mesaric, CEO of giant Swiss refiner Valcambi – sold this week to Indian jewelry corporation Rajesh Exports for US$400 million – “has been given back.

“There is liquidity in the market and liquidity is cheap. There is no need to use gold anymore,” Mesaric told Reuters, forecasting a drop in China’s imports of perhaps 40%.

Following today’s 1.7% drop in the Shanghai stock market, Beijing assured Chinese investors it will continue to support equities prices after the last 7 weeks’ 30% drop, with the People’s Bank pumping the equivalent of $5 billion into the money market.

“Physical demand in Asia remains lackluster,” says one brokerage today, pointing to “both the Indian and Chinese markets.”

“Market participants,” says a note from South Africa’s Rand Refinery, “will be closely watching the Federal Reserve meeting” for hints of whether a rate rise is coming in September.